OYO Rooms, the hospitality industry startup could be scouting for more funding, in the region of $500 to $700 million, unconfirmed reports indicate. However, the company has to look for a new investor for this fresh round to make its existing marquee investor the SoftBank Group of Japan to chip in with its own share of capital. This is the message conveyed to OYO by SoftBank, if these reports are to be trusted.
There could be a fresh valuation of the company which could also take it beyond the Unicorn status and there are possibilities some Chinese companies may be interested in making investments. As is known, OYO raised $10 million through a Chinese hospitality company China Holding Group, which also operates hotels in that country. OYO has taken its business to China as well after that. The estimate is that the valuation during that funding was in the region of $850 million; hence the expectation is that it may cross $1 billion now.
OYO Rooms has had to make certain course corrections in its overall strategy and shed the aggregator tag and go for direct leasing of properties. That move seems to have yielded some good response and even platforms like MakeMyTrip which had removed the OYO properties from its site following customer complaints etc., has restored them now. OYO boasts of 75,000 rooms under its umbrella.
That kind of a situation made it tough for OYO to raise funds from even its existing investors like Greenoaks Capital, Sequoia Capital and Lightspeed Venture Partners and had to get SoftBank alone to cough up $62 million then. Obviously, this is not the status of the company anymore and it has moved on.